Here in Michigan, there are a lot of people who are really into cars. And not just carsâ€”supercars. This article is based on a popular thread about this very topic, so we wanted to weigh in.
Itâ€™s probably fairly obvious that from a financial perspective, an exotic car doesnâ€™t make much sense. It just doesnâ€™t. But letâ€™s ignore that for now and get down to the fun stuff: the numbers.
What does a Lamborghini cost?
Letâ€™s pick out which Lamborghini to focus on. There are two new models to choose from:
- Lamborghini HuracÃ¡n: $199,800 – $262,350
- Lamborghini Aventador: $399,500 – $530,075
Letâ€™s go with the cheaper one because we know we’re a little frugal with cars.
For a trim package, letâ€™s go with the mid-tier package: the LP 619-4 AWD. This ride will come in at $237,250.
Of course, you can always lease the car for $2,950/month and $11,500 down. The lease is 36 months at 2,500 miles a year. But because we know from our previous article Avoiding Black Hole Car HabitsÂ that most millionaires buy instead of lease their cars, letâ€™s assume you want to buy this bad boy yours.
Oh yeah, maintenance
In addition to the purchase price, there are a lot of other costs to maintain a car like this. The HuracÃ¡n does come with a 3-year unlimited mileage powertrain warranty. Oil changes are about $400 and tires are $1,500 a set. Based on the Lamborghini online forum, itâ€™s recommended that you have a rainy-day maintenance fund for unexpected car expenses. Owners suggest $15,000.
All in, weâ€™re at approximately $240,000 for a new Lamborghini.
Which brings us to the question of the day: How much salary should you have to buy one?
Itâ€™s recommended that you buy a vehicle that costs less than half of your annual salary. So if youâ€™re making $50,000 a year, you buy a car thatâ€™s less than $25,000.
However, since cars are a depreciating asset, the less you pay for a car, the better. But based on the less-than-half-your-salary rule, to buy a Lamborghini you need to be makingâ€¦
Wait for itâ€¦
$480,000 a year.
You can buy a Lamborghini earning less of course. Would it be smart financially? No. But keep in mind, this isnâ€™t a wise purchase even if you are making $480K.
What to spend your money on
Your first financial priorities should be:
- Paying off debt: credit cards, loans, etc.
- Fully funding your retirement: 401(k), SEP, etc.
â€¢ Funding child educational costs
â€¢Â Paying off your mortgage
If youâ€™ve done all of those, consider making investments that can turn into potential profit: real estate, rental property, etc. That way your money can make money. Not just depreciate as it drives down the highway.
Itâ€™s a beautiful car. It is. But before you pull the trigger on any big-ticket item, think about your long-term goals. By having a financial strategy, you can help avoid the fate that some folks fall into. Remember, in the end itâ€™s not what you make that matters, itâ€™s what you keep.